Most of the year-over-year gain in cattle slaughter came from steers and heifers (up 4.7 per cent). Cow slaughter also increased, rising 3.5 per cent above 2015’s level. Most of the year-over-year increase in cow slaughter was in beef-type animals rather than dairy-type.

Increased beef production, lacklustre exports, and large processor margins have translated into lower cattle prices in 2016, as would be expected. Prices also were volatile, especially in the futures markets.

The USDA’s Agricultural Marketing Service Market News (AMS) negotiated 5-market average slaughter (fed) steer reported prices for the first six months of this year averaged just over $131.00 per cwt. compared to a shade above $160.00 last year, as drop of 18 per cent.

Lower fed cattle prices, and cattle feeders adapting their feeder cattle price bids after record large losses in 2015, caused AMS reported auction prices for 700-to 800-pound steers in the Southern Plains to plummet 30 per cent year-over-year in 2016.

Southern Plains prices for 500-to 600-pound steers in January through June averaged 33 per cent below 2015’s.

Estimating per capita beef disappearance for the first half of 2016 is instructive, even if we need to use some estimates, most importantly beef imports and exports. Here we will use the estimates by the Livestock Marketing Information Center (LMIC).

On a per person basis, beef disappearance domestically in January-June 2016 was about one pound above a year earlier. That’s not a huge increase, but the amount (27.6 pounds calculated on a retail weight equivalent basis) was the largest since 2013’s.

Of course, to increase disappearance domestically generally requires a lower price. Also, given weak world economic conditions, trade barriers, etc., during the last two years the export tonnage that was achieved required lower prices.

Briefly, what are forecasts for full calendar year US beef production? The LMIC forecasts US commercial beef production in calendar year 2016 at about 24.7 billion pounds, up 4 per cent to 5 per cent year-over-year and the largest since 2013’s. In 2016’s last 6 months, production is forecast to rise 3 per cent to 4 per cent year-over-year.

As the second half of 2016 progresses, year-over-year declines in cattle prices are forecast to moderate. As the year wraps-up, the fed steer price could match or slightly exceed the depressed level of late 2015. Feeder animal prices are expected to remain below 2015’s through year-end.